AudioCodes (AUDC) Q3 2026 Earnings Call Transcript

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DATE

Wednesday, Nov. 4, 2026

CALL PARTICIPANTS

• Chief Legal Officer - Itamar Rosen
• Chief Executive Officer - Shabtai Adlersberg
• Chief Financial Officer and Vice President of Finance - Niran Baruch

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TAKEAWAYS

• Revenue -- $64.1 million, representing a 4.2% increase compared to the prior-year period.
• Services Revenue -- $37.1 million, reflecting 19.9% year-over-year growth and accounting for 57.8% of total revenue.
• Combined ARR -- $87 million, comprising recurring revenue from Live managed services and VoiceAI applications after a 16% increase versus last year.
• Microsoft Segment Revenue -- $43 million, increasing 4% year over year and contributing approximately 66% of overall company business.
• Microsoft Bookings -- $20 million, representing a 61% year-over-year climb in new contract value for Teams phone activity.
• VoiceAI Growth Range -- 40% to 50% year over year, driven by steady demand for enterprise voice applications.
• VoiceAI Revenue Target -- $25 million for 2026, with a further long-term objective of reaching $50 million by 2028.
• SBC Revenue Projection -- $135 million for the full year, which would set a new record for the product line.
• Media Gateway Sales -- $50 million projected for the full year, marking the second consecutive year of stability after previous declines.
• Live Platform MRR -- $500,000 for September, an increase of approximately 35% compared to the prior-year period.
• GAAP Gross Margin -- 65.7%, compared to 65.5% in the third quarter of 2025.
• GAAP Net Income -- $3.6 million, or $0.15 per diluted share, compared to $2.7 million in the year-ago quarter.
• Non-GAAP Net Income -- $4 million, or $0.16 per diluted share, reflecting a decrease from $4.9 million in the third quarter of 2025.
• Operating Cash Flow -- $4.1 million generated from operating activities during the third quarter.
• Cash and Investments -- $47.1 million in total cash, equivalents, and short-term and long-term financial investments as of Sept. 30, 2026.
• Share Repurchases -- $15.1 million, reflecting the acquisition of 1.5 million ordinary shares during the quarter.
• Dividend Distribution -- $0.20 per share, totaling approximately $4.8 million in semiannual payments declared in August.
• Days Sales Outstanding -- 109 days as of the end of the third quarter.
• Headcount -- 992 full-time employees, a decrease of nine positions compared to the prior quarter.
• Meeting Insights Volume -- 90% increase in meeting volume year over year, supported by record levels of active users.
• Microsoft YTD Revenue -- $125 million for the first nine months of 2026, an increase of 5.2% year over year.
• Microsoft Pipeline -- $90 million in newly created opportunities, representing a 9.4% increase over the prior year.
• Live Platform ARR -- $5.5 million in annualized recurring revenue, bolstered by a new large customer win in Asia Pacific.
• Full-Year Revenue Guidance -- $251 million to $256 million, reiterated by management for the 2026 fiscal year.
• Full-Year Non-GAAP EPS Guidance -- $0.60 to $0.75, maintained by management as the target range for the 2026 fiscal year.

SUMMARY

AudioCodes Ltd. (NASDAQ:AUDC) reported quarterly growth driven by its core connectivity solutions and the expansion of its artificial intelligence portfolio. Management noted a transition toward a software-centric model, with services and recurring revenue increasingly contributing to the total revenue mix. The company emphasized its continued reliance on the Microsoft Teams ecosystem, which accounts for a significant portion of its overall business. Operational focus remains on scaling managed services and deploying specialized VoiceAI applications to capitalize on enterprise demand for automated communication workflows. Strategic investments are centered on integrating generative AI capabilities across the product line to enhance human-machine interaction.

• CEO Adlersberg stated, "Voice is quickly becoming 1 of the most natural, intuitive, and capable interfaces linking people and machines."
• Management reported that over 90% of quarterly revenue originated from the enterprise segment.
• The company entered a strategic partnership with Deutsche Telekom to deploy VoiceAI Connect for AI-powered mobile recording and transcription services.
• CEO Adlersberg noted, "large enterprises prefer a best of breed approach meaning they would like to choose a different LLM that is adapted to their, specific needs."
• Management reported a new contract with a major German insurance company to replace a legacy contact center with Voca CIC.
• The company launched a real-time translation application in Israel for government use cases, providing live translation for asylum seeker interviews.

INDUSTRY GLOSSARY

• SBC (Session Border Controller): A network element used to protect and regulate IP communications flows.
• UCaaS (Unified Communications as a Service): A cloud-based delivery model for various communication and collaboration applications.
• CCaaS (Contact Center as a Service): A cloud-based customer service solution that allows organizations to manage customer interactions.
• MRR (Monthly Recurring Revenue): The amount of predictable revenue a company expects to receive every month.
• ARR (Annual Recurring Revenue): A metric used to track the yearly value of recurring revenue from subscriptions or contracts.
• PSTN (Public Switched Telephone Network): The traditional circuit-switched telephone network.
• SIP Trunk: A technology that enables the connection of a PBX to the internet for making and receiving telephone calls.
• LLM (Large Language Model): An AI algorithm that uses deep learning and massive data sets to understand and generate text.
• Voca CIC: A contact center application designed specifically for integration with Microsoft Teams.
• MIA Edge: An on-premise version of Meeting Insights designed for secure, air-gapped environments.

Full Conference Call Transcript

Operator: Greetings, and welcome to the AudioCodes Third Quarter 26 Earnings Conference Call. At this time, all participants are on a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, And please note this conference is being recorded. I will now turn the conference over to your host, Itamar Rosen, Chief Legal Officer at AudioCodes. Sir? Please go ahead.

Itamar Rosen: Thank you, Alberta. Hosting the call today are Shabtai Adlersberg, president and chief executive officer and Niran Baruch, Vice President of Finance and Chief Financial Officer. Before we begin, I would like to remind you that the information provided during this call may contain forward looking statements relating to AudioCodes' business outlook, future economic performance, product introductions, plans and objectives related thereto, and statements concerning assumptions made or expectations as to any future events, conditions, performance, or other matters are forward looking statements as the term is defined under U. S. Federal securities laws. Forward looking statements are subject to various risks, uncertainties, and other factors that could cause actual results to differ materially from those stated in such statements.

These risks, uncertainties and factors include but are not limited to, the following. The effect of global economic conditions in general, conditions in AudioCodes' industry and target markets in particular, including governmental undertakings to address such conditions, shifts in supply and demand, market acceptance of new products, and the demand for existing products. The impact of competitive products and pricing on AudioCodes and its customers' products, and markets.

Timely products and technology development, upgrades, the advent of artificial intelligence, and the ability to manage changes in market conditions and evolving regulatory regimes, as applicable; the possible need for additional financing; the ability to satisfy covenants in AudioCodes' financing agreements; the possible impacts and disruptions from AudioCodes' acquisitions, including the ability of AudioCodes to successfully integrate the products and operations of acquired companies into AudioCodes' business.

Possible adverse impacts attributable to any pandemic or other public health crisis on our business and results of operations, the effect of the current and any future hostilities involving Israel, including in the regions in which we or our counterparties operate, which may affect our operations and may limit our ability to produce and sell our solutions. Any disruption in our operations by the obligations of our personnel to perform military service as a result of current or future military actions involving Israel. And any other factors described in AudioCodes' filings made with the US Securities and Exchange Commission from time to time. AudioCodes assumes no obligation to update the information.

In addition, during the call, AudioCodes will refer to non GAAP net income and net income per share. AudioCodes has provided a full reconciliation of the non GAAP net income and net income per share to its net income and net income per share according to GAAP in the press release that is posted on its website. Before I turn the call over to management, I would like to remind everyone that this call is being recorded. An archived webcast will be made available on the Investor Relations section of the company's website at the conclusion of the call. With all that said, I would like to turn the call over to Shabtai. Shabtai, please go ahead.

Shabtai Adlersberg: Thank you, Itamar. Good morning, and good afternoon, everybody. I would like to welcome all to our third quarter 2 thousand 26 conference call. With me this morning is Niran Baruch, Chief Financial Officer and Vice President of Finance of AudioCodes. Niran will start off by presenting a financial overview of the quarter, I will then review the business highlights and summary for the quarter and discuss trends and developments in our business and industry. We will then turn it into the Q&A session.

Niran Baruch: Thank you, Shabtai. Before I start my formal remarks, I would like to remind everyone that in conjunction with our earnings release this morning, we will post shortly on our Investor Relations website an earnings supplemental deck. On today's call, we will be referring to both GAAP and non GAAP financial results. The earnings press release that we issued earlier this morning contains a reconciliation of the supplemental non GAAP financial information that I will be discussing on this call. Revenues for the third quarter were $64.1 million an increase of 4.2% over the $61.5 million reported in the third quarter of last year.

Services revenues for the third quarter were 37.1 million an increase of 19.9% over the year ago period. Services revenues in the third quarter accounted for 57.8% of total revenues. Revenue by geography was as follows. North America, 47%. EMEA, 34%, Asia Pacific, 16%, and Central and Latin America, 3%. Our top 15 customers represented an aggregate of 56% of our revenues in the third quarter, of which 35% was attributed to our 10 largest distributors. GAAP results are as follows. Gross margin for the quarter was 65.7% compared to 65.5% in Q3 25. Operating income for the third quarter was $3.4 million or 5.3% of revenues. Compared to operating income of $4.1 million or 6.6% of revenues in 2025.

Net income for the quarter was $3.6 million or $0.15 per diluted share compared to net income of $2.7 million or $0.10 per diluted share for Q3 25. Non GAAP results are as follows: Non GAAP gross margin for the quarter was 65.8% compared to 65.8% in Q3 25. Non GAAP operating income for the third quarter was $4.8 million or 7.4% of revenues. Compared to $5.8 million or 9.5% of revenues in Q3 25. Non GAAP net income for the third quarter was $4 million or $0.16 per diluted share compared to $4.9 million or $0.17 per diluted share in Q3 25.

At the end of September 26, cash, cash equivalents, short term bank deposits, short term market securities and long-term financial investments was $47.1 million. Net cash provided by operating activities was $4.1 million for the third quarter of 26, Days sales outstanding as of September 30, 2026, were 109 days. On August 4, 2026,, we declared a semiannual cash dividend of $0.20 per share, aggregate amount of the dividend was approximately $4.8 million. In September 2026, we received court approval in Israel to purchase up to an aggregate amount of $30 million of our ordinary shares. The court approval also permits us to declare a dividend out of any part of this amount.

The approval is valid through March 9, 2027. During the quarter, we acquired 1.5 million of our ordinary shares for a total consideration of approximately $15.1 million Now to provide an update on guidance. We reiterate our guidance for revenues for 2026 to be in the range of $251 million to $256 million and non GAAP earnings per share of $0.60 to $0.75 I will now turn the call over to Shabtai.

Shabtai Adlersberg: Thank you, Niran. Third quarter 2 thousand 26 delivered solid financial results and healthy operating performance with both core business areas moving forward. Connectivity for UCaaS and CCaaS is an established profitable, market leading activity. VoiceAI is a younger business started back in 2018. Continues to expand, and is projected to become a major growth driver over the coming years. 2 primary growth engines continues to propel revenue. Live managed services and voice AI application aimed at the emerging intelligent-voice enterprise. By the end of third quarter 2 thousand 26, they jointly represented $87 million in annual recurring revenues, a 16% increase from the prior year, which highlights how much high quality recurring revenue now contributes to the business model.

Over the last 3 years, annual recurring revenue has expanded by almost 90%. Providing a solid base for further growth. Results from both primary business metrics met expectations. Connectivity held its leading position in the UCaaS and CCaaS market, and VoiceAI kept growing at 40% to 50% year over year. As a result, the company remains on course, for its stated VoiceAI revenue target of $25 million in 2026 and its goal of $50 million by 2028. Now to some of the financial highlights of the core. Year over year revenue growth picked up to 4.2%. Over 90% of revenue came from the enterprise segment, with the Microsoft Teams phone business expanding 4%. Lead.

Connectivity covering the SBC gateways and CPE business lines has kept its revenue steady. The SBC business line has had a good year so far. Revenue is up 8.2% year to date versus the 3 the first 3 quarters of 2025. And full year revenue is on track to exceed $135 million, which would be a which would set a record above the prior high of $131 million back in 2024. Among gateway sales, third quarter 26 was the best quarter of the year to date, and the full year is projected to be roughly $50 million. 2026 will mark the second consecutive year of stability and modest growth. Following the gateway revenue decline of 2023 and 2024.

Service revenue rose 19.8% year over year and now makes up about 58% of total revenues. Headcount stood at 992 full-time employees. At the close of third quarter. 9 fewer positions than in the prior quarter. Operating activities generated $4.1 million in net cash during the quarter. All those represent great financial performance in the third quarter. So to business strategy, what is driving our new growth story? What gives us the confidence that our strategy direction is the right 1, and that we are well positioned to capitalize on the opportunities ahead. Several durable industry trends underpin our growth strategy. Reshaping enterprise communications through the adoption of new intelligent-voice technology.

Central to this shift is the fast progress of GenAI, which is altering how people engage with computers, machines, and intelligent systems. Voice is quickly becoming 1 of the most natural, intuitive, and capable interfaces linking people and machines. Advances in speech recognition, natural language processing and understanding, and real time conversational AI make interacting with intelligent systems feel increasingly human. These advances also carry voice AI beyond basic human-machine interaction. They opened the way to intelligent automation of conversations, communications, and business workflows throughout the enterprise. Taken together, these developments strengthen the view that intelligent voice for the enterprise is a major growth opportunity, and they underlines the decision to speed up investments in intelligent-voice solutions for the enterprises.

AudioCode has invested in the UCaaS world for about 25 years now, which places us in a strong position to pursue this opportunity. A customer base that has grown over several decades in voice communication to thousands of accounts, for both voice communication and infrastructure. Together with long standing leadership in voice system, and solution supports the company ability to lead this space. Now let's move to some of the actual business line. Let's talk first about Microsoft. Microsoft is practically delivering about close to 66% of our overall business. Third quarter 2 thousand 26 revenue came to $43 million, up 4% year over year.

Over the first 9 months of 2026, revenue from the Microsoft business rose 5.2% year over year to $125 million. Which keeps the company on course for its stated full year revenue goal of above $170 million. Newly created opportunities in this space reached $90 million, a 9.4% increase over the prior year that points to a healthy demand environment ahead. Bookings of new contract value linked to Microsoft Teams phone activity climbed 61% year over year to more than $20 million. The quarter marks the second consecutive record quarter, which is a solid evidence of this segment potential and leadership in the space.

Momentum build in the third quarter on the opportunity that is above $10 million that we reported in the previous quarter. After starting at a monthly recurring revenue of only tens of dollars in the second quarter, the focus is now for an MRR of several hundred thousand by mid 2 thousand 27. As reported earlier, the project is expected to several million dollars of product revenue annually over the next 3 years on top of the annual gateway sales. The Microsoft Team voice ecosystem is healthy overall. Teams phone represents only a small share of the more than 320 million monthly active Teams users. And with voice becoming more central, Microsoft's enterprise strategy and for AI driven Copilot workplace.

Long term outlook for this market looks favorable. A key component of our sales in the Microsoft space is the live platform for Live for Teams. Sales of live platform made good headway, in the third quarter as the platform serves as the core underlying technology for the live Teams solution portfolio. Enterprises, service providers, and partners use AudioCodes' Live platform, a cloud-based voice service delivery platform to deploy, manage, and scale enterprise voice communications and AI powered voice services. Comprising voice connectivity, centralized management, and automation. AudioCodes live platform kept up its strong growth in third quarter. September monthly recurring revenue came to $500 thousand an increased the roughly 35% year over year.

A new large customer in Asia Pacific signed in the third quarter of 2026 helped push live platform services to $5.5 million in annualized recurring revenues. This adds to the momentum behind cloud-based intelligent-voice service strategy. Now to the conversational AI business. The voice AI growth strategy was carried out successfully in the third quarter. adding 1 more quarter of growth. VoiceAI revenue rose by nearly 50% year over year, in the first 9 months of 2025 compared to those first 9 months of 2025. That result moves the business nearer to its stated annual goal of 50% growth year over year. and $25 million in revenue for the full year of 2026.

Strengths in VoiceAI Technologies combined with a distinctive mix of expertise in telephony, networking, security management, and orchestration for intelligent voice in business applications, across cloud and edge computing, underlines the success in the conversational AI segment. The discussion now moves to business lines within that category in more detail. Let's begin with VoiceAI Connect. So AudioCodes' VoiceAI Connect technology and solution link enterprise telephony networks with the fast growing ecosystem of voice AI business applications. Drawing on AudioCodes' deep experience in voice communication and SBC technology, VoiceAI Connect lets enterprises and solution providers join existing telephone infrastructure, such as the PSTN, SIP trunks, PBXs, UCaaS, CCaaS, and the WebRTC. with advanced conversational AI solutions.

Large enterprise and service provider customers, among them, Deutsche Telekom, Vodafone, Rabobank, and others. Are planning to build tens of distinct voice AI agent across their operations. All would be a VoiceAI target market. Connectivity is only 1 part of the offering. VoiceAI Connect also supplies a flexible orchestration layer that integrates and coordinates best of breed AI technologies. Those including speech to text, text to speech, large language models, speaker identification and authentication, real time translation, voice analytics and recording. Above this layer, sit enterprise applications, such as integration with CRMs, contact centers, databases, and business workflows. VoiceAI Connect and Live Hub operations advanced significantly over the course of third quarter of 2026.

An accelerating pipeline, steady flow of new logos, substantial expansion with the existing customer base made the momentum broad based. Invoicing revenues grew by close to 40% in the first 9 months of 2025. A 60% increase in bookings was recorded for the first 9 months of 2026 versus the prior-year period. The number of new opportunities created was more than 40% higher than in the same period of 2025. Notable wins with large enterprises in North America and Europe are also worth mentioning including a major multi million dollar and 24 months contract from a very large network operator in North America.

What was unique in this cohort that, you know, usually, VoiceAI Connect opportunities, when so typically confidential, are usually not allowed to be, talked about. But there was 1 unique announcement that was published in the third quarter. Deutsche Telekom announced that they have selected AudioCodes with SIR Connect for their AI powered mobile services. So in October 2026, Deutsche Telekom announced the deployment of the AudioCodes' Voice AI Connect. To power its new mobile AI Notes mobile service for business customers. Providing automatically recording, transcribing, and summarizations for mobile conversations.

Voca Connect serves as a connectivity and orchestration layer between Deutsche Telekom mobile network and Mistral AI a French company demonstrating its ability to enable scalable network integrated voice AI services. This deployment represents an important strategic validation of Voca Connect's potential as an enabler for telecom operators. seeking to introduce and monetize broad based a range of AI powered voice services. Now to Voca CIC or AI first. Contact center solution for Microsoft Teams. Voca CIC kept up its strong operational momentum during the quarter, with new customer wins in education, financial services, and large enterprises, along with growing adoption of AI capabilities. Revenue in the third quarter grew according to plan.

Let me dwell on some unique wins in that quarter. We see deeper traction in education mainly. Another major US higher education institution chose Voca CIC. This course is part of a project that also covers the AudioCodes Live for Teams for Microsoft. The deal additionally covers omnichannel capabilities with agent insights, the automated conversation summarization for agents supporting them. Dozens of universities and colleges worldwide are now customers reflecting both the depth and the potential of the education vertical for Voca CIC. Next, let's talk about financial services. After the Swiss and Asian banking wins for Voca CIC, as noted in earlier quarter, a major German insurance company chose Voca CIC this quarter to replace its legacy contact center.

That makes 3 quarters in a row which major financial institution has selected the Voca CIC. Then let's talk about partner-driven wins. Voca CIC is bundled with audio codes live Teams. Microsoft migration project and the same approach applies with AT&T business and its AT&T cloud-based offering for Teams phone. In the third quarter, the partnership produced a win of a Fortune 500 global enterprise, which chose Voca CIC through AT&T. [Inaudible]

Operator: Mr. Adlersberg, your line has just gone robotic for a moment. Apologies.

Shabtai Adlersberg: Okay. Can I continue?

Operator: Yes, sir. If you keep talking, I will let you know once it is cleared up.

Shabtai Adlersberg: Fine. Okay, so let's move on to, the next voice AI. Area of activity, which is Meeting Insights. Talking about Meeting Insights Cloud Edition, strong momentum carried Meeting Insights Cloud Edition through the quarter. it is key operating metrics kept growing. Meeting volume climbed 90% year over year, Monthly recurring revenue more than doubled, and active number of users set a new record with 50% year-over-year growth. By the end of the third quarter 2 thousand 26, Meeting Insights had become a mature field proven cloud platform shaped by years of innovation and customer deployments. A significant rise in the use of Meeting Insights mobile client recording ranked among the main developments of third quarter.

Beginning in the third quarter of 2026, a shift in the go to market approach towards specific verticals has noticeably improved the rate of winning new accounts, customized, tailored workflow solutions for these verticals form the basis of the strategy, which keeps gaining traction and is producing meaningful commercial momentum. Moving to the last business line in the VoiceAI business. Moving on to MIA Edge. MIA Edge is our next generation Meeting Insights on-prem solution, which provides secure meeting analysis and intelligent extraction. Interest in air gapped solution, which operate without access to the Internet or to cloud services. Has been rising in recent years.

Secure meeting insights and intelligent extraction is what MIA Edge offers, with government and defense use cases as the main target. Growing worldwide, emphasis on data sovereignty has produced comparable needs in verticals such as health care and finance. More than 25 accounts were active as of the second quarter, according to our previous reporting. 10 were in production and a rise in pilots and implementation. A new advanced solution launched in the third quarter brought in 11 new customers across defense, health care, security, infrastructure, and government in Israel. The quarter saw the first development and deployment in Israel of a real time translation application for asylum seekers. Adopted by the state population and immigration authority.

It provides live translation in its interview rooms. daily. it is now in full use. Evaluation of this solution is now underway at 2 comparable European authorities. Other public organization, including police and further public service entities, also evaluating real-time translation as a way to simplify the typically complex job of serving foreign citizen and visitors in the given country. And with that, I have pretty much concluded my presentation. Just to wrap up, operational momentum was good in the third quarter of 2 thousand 26. Driven especially by continued strong growth in 2 primary engines the live family of managed services, and voice AI business application.

Steady gains in recurring revenue operations, and services keep the company on track to meet its business target for the full year of 2026. And with that, I have concluded my presentation, and I will open the session for questions and answers.

Operator: Thank you, sir. Ladies and gentlemen, apologies. Thank you. Ladies and gentlemen, at this time, we will be conducting our question and answer session. If you wish to ask a question, please press *1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. And you may press *2 if you wish to remove your question from the queue. It may be necessary to pick up your handset before pressing the number keys. 1 moment, please, while we poll for questions. Thank you. We have a question from Joshua Riley with Needham. Your line is live.

Joshua: Alright. Thanks for taking my questions. Starting off on VoiceAI Connect. You have positioned it as a vendor neutral orchestration layer that keeps enterprises from being tied to a single AI vendor. At the same time, Microsoft, Zoom, NICE, and other cloud communication vendors are all bundling their own AI agents into their platforms. In your recent wins and pipeline, how often are customers choosing a best of breed multi vendor approach versus just using the AI that comes with their phone or contact center platform, and what is typically driving that choice.

Shabtai Adlersberg: Okay and thank you, Joshua. Well, you know, as we all know, VoiceAI is making advances at a very fast pace. And, actually, we all know that, large enterprises prefer a best of breed approach meaning they would like to choose a different LLM that is adapted to their, specific needs, a different speech to text, and a few more. So, yes, it is true that, you know, the traditional, I would say, you see providers such as Microsoft and others have a complete set of functionalities, but when we work with large enterprises and talking to enterprises that have hundreds of employees.

They prefer to work with some of the more advanced frameworks, some much of those from, Google or from others. And usually, the flexibility. Just assume that you have been working with an LLM, and there is a new 1 that came up, more accurate, cheaper. You would like to be able to switch to that new LLM in a matter of simple development. And that was the value that VoiceAI Connect offers as it is providing full flexibility in and evolving their solution with different components that may appear in a very fast pace.

Joshua: Great. On MIA Edge, you have described strong interest from government, defense, health care, and finance customers that cannot use AI on public clouds. How eager are these regulated customers to adopt AI in closed or air gapped environments today? And are they moving from pilots to production or still mostly evaluating?

Shabtai Adlersberg: Well, actually, the need is very urgent. Especially when you are talking about defense applications. They need to move fast because we all understand that the use of meeting intelligence and the ability to, to transcribe, generate summaries, and few more applications is ramping very fast. Think about organizations which are in need of the duty to respond to new threats at a very fast pace. So yes, I think we will usually. And substantially different than what we see in, networking and telecom. The move is pretty fast. They test the application fairly fast, respond to what needs to be fixed or improved, and then they move very fast to production.

So this is an increasing trend today in the world. Everybody kind of starts with big organizations. Enterprises, and governments, feel the need to go completely off the public internet or clouds, and therefore, it is well, talking about organization in Europe, we know that they are very anxious. To be using their own technology, and they do not want to go cloud. So it is a fast growing trend. Great. Thanks for taking my questions. Sure. You are most welcome.

Operator: Thank you. If there will be any final questions, please indicate so now by pressing *1 on your telephone keypad. Okay. As we have no further questions on the lines at this time, I would like to turn the call back over to Mr. Adlersberg for any closing remarks.

Shabtai Adlersberg: Thank you, operator. I would like to thank everyone who attended our conference call today with continued solid performance in our UCaaS and CCaaS operations and rapid growth in the VoiceAI business, we believe we are on track to grow and expand our business in the next coming years. We look forward to your participation in our next quarterly conference call. Thank you all. Have a nice day.

Operator: Thank you. Ladies and gentlemen, this does conclude today's conference. You may disconnect your lines at this time, and we thank you for your participation.

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